Riverside County officials say changes to the county’s public employee pension system have saved money, but that the county will still pay millions of dollars more to the statewide pension network.

A recent report on the county’s pension fund found that in 2023, the county could pay $158.5 million more to the California Public Employees’ Retirement System than it does now.

At the same time, the county’s pension fund is healthy and the county saved $87.3 million this past fiscal year from the 2012 pension overhaul, according to the annual report from the Pension Advisory Review Committee, which includes the county’s treasurer/tax collector, human resources chief and finance director.

Pensions were a major issue four years ago, when officials warned the county’s pension costs were unsustainable and threatened to drain money from public services.

After contentious labor negotiations that led to a one-day protest at the County Administrative Center, the Board of Supervisors struck deals with labor unions that guaranteed pay raises in exchange for employees paying more toward their retirement.

The changes also established a lower pension rate for new hires. Statewide pension reform added another, lesser tier of pension benefits.

The county has struggled to afford the raises. But supervisors say the pension deal is worth it.

The committee found that pension changes saved the county $87.3 million in fiscal 2014-15. Savings for the fiscal year that started July 1 are estimated at $93.4 million and future annual savings are projected to exceed $100 million.

The savings are “building up like a snowball,” Supervisor Marion Ashley said at the board’s June 16 meeting. “It used to be a snowball in reverse, hurting us.”

The county’s liabilities for public safety and non-public safety pensions are 83.3 percent funded and 85.1 percent funded, respectively, according to the report. The industry standard calls for 80 percent of pension obligations to be funded, the committee said.

The county’s unfunded pension liability stands at $1.285 billion.

While the county took steps to control its pension costs, it still faces steep payments to CalPERS, which took a big stock market hit during the Great Recession.

CalPERS earned 2.4 percent on its investments for the fiscal year ending June 30, its poorest performance since 2012, The Wall Street Journal reported. The agency’s rate of return the past three and five years was 10.9 percent and 10.7 percent, respectively – higher than the assumed return of 7.5 percent, according to CalPERS.

CalPERS looks to member agencies, such as the county, to make up the difference when investments fail to fully cover pension costs. In the past, CalPERS smoothed out the hit from the Great Recession losses, but that’s going away, said County Finance Officer Ed Corser.

Also, CalPERS made changes to demographic assumptions, including an improved mortality rate for pension recipients, the committee said.

By the time fiscal 2022-23 rolls around, the county could pay $158.5 million more to CalPERS for public safety and non-public safety pensions than it does now, according to a consultant’s estimates.

Besides pensions and raises, the county faces new spending commitments, including costs stemming from public safety realignment, which shifted responsibility for certain low-level offenders from the state to counties, and a $330 million expansion of the Indio jail, which is intended to ease crowding that has forced the early release of tens of thousands of jail inmates.

The cash crunch could lead supervisors to take a harder line with unions during the next round of collective bargaining. Most union deals are set to expire next year.

“We need to all take a deep breath and look at this and understand why things are as tough as they are, even in an improving economy,” Supervisor John Benoit said last month. “Some of these impacts are huge.”

“So I don’t mean to be dour and I don’t want to be the bearer of bad news. I’m just looking at the facts. We have to pay those (CalPERS) rates,” he added. “We absolutely had to give some things away at the bargaining table to get (pension changes).”

“I think we had a good result the last time around. And as a result we’re seeing some savings. But the savings have been eclipsed by the changes in the PERS rules and we’re going to have to live with that.”

Jeff Horseman got into journalism because he liked to write and stunk at math. He grew up in Vermont and he honed his interviewing skills as a supermarket cashier by asking Bernie Sanders “Paper or plastic?” After graduating from Syracuse University in 1999, Jeff began his journalistic odyssey at The Watertown Daily Times in upstate New York, where he impressed then-U.S. Senate candidate Hillary Clinton so much she called him “John” at the end of an interview. From there, he went to Annapolis, Maryland, where he covered city, county and state government at The Capital newspaper before love and the quest for snowless winters took him in 2007 to Southern California, where he started out covering Temecula for The Press-Enterprise. Today, Jeff writes about Riverside County government and regional politics. Along the way, Jeff has covered wildfires, a tropical storm, 9/11 and the Dec. 2 terror attack in San Bernardino. If you have a question or story idea about politics or the inner workings of government, please let Jeff know. He’ll do his best to answer, even if it involves a little math.

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